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Phone manufacturers warming to GPS

After hitting alarm clock makers and camera manufacturers, the mobile phone industry has a new target – personal navigation device makers.
Handset makers see navigation as one of the next major value-adding offerings and even at this very early stage, analysts say the annual market for phone navigation is worth hundreds of millions of dollars.

While a few years ago personal navigation device makers like Dutch TomTom shrugged off possible rivalry from the handset industry, they have now acknowledged the potential risk to their business.

The world’s top handset maker Nokia started to sell its first navigation phone N95 two weeks ago, and other top vendors are expected to follow shortly, hoping to make 2007 the breakthrough year for cell phone navigation.

The N95, with a $1379 price tag, is not in reach of the masses despite first reports showing strong sales, but the Finnish firm aims to bring GPS positioning chips to a wide array of its products.

“I believe it will quickly go through almost the whole of our portfolio,” Kai Oistamo, head of Nokia’s Mobile Phones unit, told a recent news conference.

The GPS technology enables handset makers to bypass mobile phone network operators and at least some of the navigation phones can be used for routing when not connected to operators’ networks.

Nokia, which bought into the navigation industry last year with the acquisition of German firm Gate5, rolled out a free Nokia Maps service in February, giving away maps and routing data while charging consumers for a turn-by-turn navigation service.

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